Using Non-Wage Garnishment to Collect Debt

When Illinois creditors use court action to retrieve debts, they can collect from debtor wages or other assets. With some exemptions, creditors can claim part or all of a variety of assets and properties. Non-wage garnishment can give creditors access to assets of greater value than what can be deducted from a debtor’s wages, as long as the assets are not exempt.

Bank Accounts

Banks are the most common source for non-wage garnishment. Once a court affirms that a debtor is liable, the creditor can serve the debtor and the debtor’s bank with a garnishment notice. Once it receives the notice, the bank must freeze the debtor’s accounts until a court rules on the garnishment. Banks will typically receive the notice a couple of days before the debtor to prevent the debtor from avoiding garnishment by withdrawing money from an account.

If the court rules in favor of the creditor, money in the debtor’s accounts is protected by several exemptions:

The debtor can claim a “wild card” exemption of as much as $4,000 in the accounts. The debtor must request the exemption in court, as it is not automatic.

Any money from retirement funds, disability payments and life insurance policies are exempt.

If non-debtors are joint-owners of an account, they can protect any money in the account they can prove belongs to them.

Other Assets

A creditor can file a citation to discover assets in order to determine what valuable assets the debtor possesses. The creditor can then use a turn-over order to collect assets, which can be sold to pay off the debt. Examples of assets include:

Real estate;

Vehicles;

Jewelry;

Household appliances;

Personal computers; and

Business equipment.

Asset Exemptions

As with bank accounts, there are several exemptions that debtors can use to protect their assets:

The homestead exemption prevents a creditor from selling a debtor’s real property if the debtor’s equity interest in the property is less than a certain amount. The exemption is $15,000 for a single person and $30,000 for a married couple.

Debtors can exempt one vehicle if their equity interest in the vehicle is $2,400 or less.

Debtors can use the $4,000 “wild card” exemption towards equity interest in any other personal property. The $4,000 can also be combined with the $2,400 vehicle exemption.

Collecting Debt

Debtors own many assets that creditors can use to repay debts. Contact a Chicago debt collection attorney at Walinski & Associates, P.C. to learn how to access those assets.

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